Acquisition of Helly Hansen
Kontoor Brands cleared regulatory approval for the acquisition of Helly Hansen, expected to significantly boost revenue growth, earnings, and cash flow. Helly Hansen is anticipated to contribute approximately $425 million to full-year revenue, with expectations of double-digit growth in the second half of the year.
Wrangler Brand Performance
Wrangler's global revenues increased by 3%, with particular strength in the female business, which grew by 40%. The brand gained 70 basis points of market share in men's and women's bottoms.
Improved Gross Margin
Adjusted gross margin expanded by 200 basis points to 47.7%, driven by lower input costs and favorable mix, exceeding expectations by 170 basis points.
Strong Cash Generation
Kontoor Brands finished the quarter with net debt of $379 million and $357 million in cash, with a net leverage ratio of 0.9 times, below the targeted range.